CIN: L28920MH1945PLC004520

Transcription

1 Srl. No: Date: April 27, 216 TATA MOTORS LIMITED Incorporated as a public limited liability company under the Indian Companies Act (VII of 1913) Date of Incorporation: Incorporated on 1 st September 1945, as "Tata Locomotive and Engineering Company Limited Registered Office: Bombay House, 24 Homi Mody Street, Mumbai 4 1 Tel. No Fax : ; Website : CIN: L2892MH1945PLC452 Issue of Rated, Listed, Unsecured, 8.25% (Eight Decimal Point Two Five) Coupon, Redeemable, Non-Convertible Debentures of a face value of `1,,/- (Rupees Ten Lakhs only) each ( Debentures ), aggregating `3 Crores (Rupees Three Hundred Crores only) on a private placement basis (the Issue ) BACKGROUND This Information Memorandum is related to the Debentures to be issued by Tata Motors Limited (the Issuer or Company ) on a private placement basis and contains relevant information and disclosures required for the purpose of issuing of the Debentures. The issue of the Debentures comprised in the Issue and described under this Information Memorandum has been authorised by a resolution passed by the Board of Directors of the Issuer on May 26, 215, subsequently revalidated on November 6, 215 and on March 3, 216, in line with the Reserve Bank of India Master Circular No. RBI/211-12/65 DBOD No.BP.BC.19/ / dated July 1, 211 and by the duly constituted Committee of Executives and Directors' resolution dated April 27, 216. GENERAL RISK Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and this Information Memorandum including the risks involved. The securities have not been recommended or approved by Securities and Exchange Board of India ( SEBI ) nor does SEBI guarantee the accuracy or adequacy of this Information Memorandum. ISSUER S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that all information with regard to the Issuer and the Issue in this Information Memorandum is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Information Memorandum as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. DEBENTURE HOLDERS The Debentures mentioned herein are not offered for sale or subscription to the public, but are being privately placed with a limited number of eligible resident Indian Investors. This Information Memorandum should not be treated as an offer for sale or solicitation of an offer to buy the Debentures as prescribed herein by any person, who is not a company incorporated in accordance with the provisions of the Companies Act, 1956 or Companies Act, 213 or a bank or financial institution under banks and such financial institutions and insurance companies as are set out in Rule 2 of the Companies (Acceptance of Deposit) Rules, 214. This Information Memorandum does not constitute an offer for sale or a solicitation of an offer to buy the Debentures as described herein from any person other than the person whose name appears on the cover page of this Information Memorandum. No person other than such person, receiving a serially numbered copy of this document may treat the same as constituting an offer to sell or a solicitation of an offer to buy the Debentures. The Company is not liable if this Information Memorandum has been received by an Arranger, or by a Person who was provided a copy of this Information Memorandum by an Arranger. The distribution of this Information Memorandum and offer and sale of Debentures in certain jurisdiction may be restricted by law. It does not constitute an offer for sale or solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such state or jurisdiction. Persons into whose possession this Information Memorandum comes are required to inform themselves as to (a) the legal requirements for the purchase, holding or disposal of the Debentures, (b) any legal restrictions which may affect them and (c) the income and other tax consequences which may apply relevant to the purchase, holding or disposal of the Debentures. CREDIT RATING (in alphabetical order) Credit Analysis & Research Limited (CARE) has assigned CARE AA+ (pronounced as CARE Double A Plus) rating to the captioned Issue by the Company aggregating to `3 Crores (Rupees Three Hundred Crores only). Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. The above rating is not a recommendation to buy, sell or hold securities and Investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning Credit Rating Agency and rating should be evaluated independently of any other rating. The rating obtained is subject to revision at any point of time in the future. 1

2 LISTING The Debentures offered through this Information Memorandum are proposed to be listed on the Wholesale Debt Market Segment of BSE Limited ( BSE ) and National Stock Exchange of India Limited ( NSE ). The Company has obtained in-principle approvals from the BSE and NSE on April 26, 216, for listing the Debentures offered through this Issue. Sole Arranger Kotak Mahindra Bank Limited 27BKC, Plot No. C - 27, G Block, Bandra Kurla Complex, Bandra East, Mumbai-451 CIN L6511MH1985PLC38137 Tel: Fax: Debenture Trustee IL&FS Trust Company Limited The IL&FS Financial Centre, 7th Floor, East Quadrant, Plot C- 22, G Block, Bandra Kurla Complex, Bandra (E), Mumbai id : itcl@ilfsindia.com Fax No : Registrar to the Issue TSR Darashaw Limited 6-1, Haji Moosa Patrawala Ind. Estate, 2, Dr. E. Moses Road, Mahalaxmi, Mumbai Tel No ISSUE PROGRAMME Issue Opens on : April 27, 216 Issue Closes on : April 27, 216 2

3 TABLE OF CONTENTS S. No. Content Page No. 1 Definitions and Abbreviations 4 2 Disclaimers 6 3 Risk factors 9 4 Brief Details about the Issuer 25 5 Brief Summary and Activities of the Issuer 27 6 Brief History of the Issuer 35 7 Details of Shareholding of the Company as on March 31, Details of Directors of the Company 43 9 Details of Auditors of the Company 47 1 Details of Borrowings of the Company as on March 31, Details of Promoters of the Company as on March 31, Abridged version of Audited Consolidated and Standalone Financial Information Material event/development having implication on Financials Name of Debenture Trustee along with Statement on their Consent Rating Letter Copy of Consent Letter of Debenture Trustee Listing of Securities Other Information Details of Issue 68 2 Inspection of Documents Other Information and Issue Procedure 7 22 Annexures Annexure 1- Term Sheet 77 Annexure 2- Credit Rating Letter from CARE 81 Annexure 3- Consent Letter from Debenture Trustee 83 Annexure 4- Application Form 84 3

4 DEFINITIONS AND ABBREVIATIONS Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this Information Memorandum. The Company / Issuer / TML / Tata Motors Application Form Allot/Allotment/Allotted Account Bank Board Business Days Credit Rating Agency(ies) Crore Date of Allotment Debentures Debenture Holder(s) Debenture Trustee Depository(ies) Fiat FY GVW Information Memorandum Investor Tata Motors Limited, a company having its registered office at Bombay House, 24 Homi Mody Street, Mumbai 4 1 The form used by an Investor to apply for subscription to the Debentures offered through this Issue Unless the context otherwise requires or implies, the allotment of the Debentures pursuant to the Issue HDFC Bank at its branch situated at Nanik Motwani Marg, Fort, 4 1 Board of Directors of the Company or a Committee thereof Mumbai Business Day shall mean a day (other than a public holiday for the purpose of Section 25 of the Negotiable Instruments Act, 1881 (26 of 1881) or a Sunday) on which banks are normally open for business in Mumbai Credit Analysis & Research Limited (CARE) or ICRA Limited or any other credit rating agency, appointed from time to time 1 Crore = 1 Million The date on which Allotment for the Issue is made Rated, Listed, Unsecured, 8.25% (Eight Decimal Point Two Five) Coupon, Redeemable, Non-Convertible Debentures of the Company of a face value of `1,, (Rupees Ten Lakhs) each The Investors who are Allotted the said Debentures Trustee for the Debenture Holder(s), in this case being IL&FS Trust Company Limited National Securities Depository Limited (NSDL) / Central Depository Services (India) Limited (CDSL) Fiat Group Automobiles SpA Financial Year Gross Vehicle Weight Issue Opening Date April 27, 216 Issue Closing Date April 27, 216 LCV M&HCV This Information Memorandum dated April 27, 216 pursuant to which the Debentures are being offered for private placement Such eligible person who subscribe to this Issue and any eligible person which subsequently purchase the Debentures Light Commercial Vehicles, being vehicles that have GVW of up to 7.5 metric tons Medium and Heavy Commercial Vehicles, being vehicles that have GVW of over 7.5 metric tons 4

5 Mutual Fund NRI Offer Documents Private Placement Offer Letter Registrar/Registrar to the Issue RTGS RBI SEBI SEBI Regulations Stock Exchanges The Act WDM A mutual fund registered with SEBI under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 A person resident outside India, who is a citizen of India or a person of Indian origin and shall have the same meaning as ascribed to such term in the Foreign Exchange Management Act, 1999 and the rules and regulations framed thereunder Shall mean this Information Memorandum and the Private Placement Offer Letter The letter issued by the Issuer pursuant to Section 42 of the Companies Act read with the Companies (Prospectus and Allotment of Securities) Rules, 214 in the format set out in the said rules Registrar and Transfer Agent to the Issue, in this case being TSR Darashaw Limited. Real Time Gross Settlement The Reserve Bank of India Securities and Exchange Board of India constituted under the Securities and Exchange Board of India Act, 1992 (as amended from time to time) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 28 (as amended from time to time, including the Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 212) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 215 BSE and NSE The Companies Act, 213 or any applicable residual sections of the Companies Act, 1956 Wholesale Debt Market segment of the BSE and NSE. 5

6 DISCLAIMERS ISSUER S DISCLAIMER This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus. The Issue of Debentures proposed to be listed on the WDM is being made strictly on a private placement basis in accordance with applicable law. Multiple copies hereof given to the same entity shall be deemed to be given to the same person and shall be treated as such. The Offer Documents do not constitute and shall not be deemed to constitute an offer or an invitation to subscribe to the Debentures to the public in general. This Information Memorandum should not be construed to be a prospectus or a statement in lieu of prospectus under the Companies Act. This Information Memorandum has been prepared in conformity with the SEBI Regulations. Neither the Offer Documents nor any other information supplied in connection with the Debentures is intended to provide the basis of any credit or other evaluation and any recipient of this Information Memorandum should not consider such receipt a recommendation to purchase any Debentures. Each Investor contemplating purchasing any Debentures should make its own independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential Investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyze such investment and the suitability of such investment to such Investor's particular circumstances. The Issuer confirms that, as of the date hereof, all information in this Information Memorandum is accurate in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein, in the light of the circumstances under which they are made, and are not misleading. No person should rely on any information given by any person in relation to TML or the Issue other than as set out in the Offer Documents. No person has been authorized to give any information or to make any representation not contained or incorporated by reference in the Offer Documents or in any material made available by the Issuer to any potential Investor pursuant hereto and, if given or made, such information or representation must not be relied upon as having been authorized by the Issuer. The Offer Documents and the contents hereof are restricted only for the intended recipient(s) who have been addressed directly and specifically through a communication by the Company and only such recipients are eligible to apply for the Debentures. All potential Investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue. The contents of the Offer Documents are intended to be used only by those Investors to whom it is distributed. It is not intended for distribution to any other person and should not be reproduced by the recipient. No invitation is being made to any persons other than those to whom application forms along with the Offer Documents have been sent. Any application by a person to whom the Offer Documents have not been sent by the Issuer shall be rejected without assigning any reason. The person who is in receipt of the Offer Documents shall not reproduce or distribute in whole or part or make any announcement in public or to a third party regarding the contents without the consent of the Issuer. The Issuer does not undertake to update the Offer Documents to reflect subsequent events after the date of the relevant Offer Documents and thus it should not be relied upon with respect to such subsequent events without first confirming its accuracy with the Issuer. Neither the delivery of the Offer Documents nor the issue of any Debentures made hereunder shall, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of the Issuer since the date hereof. 6

7 The Offer Documents do not constitute, nor may they be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. No action is being taken to permit an offering of the Debentures or the distribution of the Offer Documents in any jurisdiction where such action is required. Persons into whose possession the Offer Documents come are required to inform themselves about and to observe such restrictions. The Offer Documents are made available to Investors on the strict understanding that it is confidential. DISCLAIMER CLAUSE OF THE STOCK EXCHANGES As required, a copy of this Information Memorandum has been filed with the Stock Exchanges in terms of the SEBI Regulations. It is to be distinctly understood that submission of this Information Memorandum to the Stock Exchanges should not in any way be deemed or construed to mean that this Information Memorandum has been reviewed, cleared or approved by the Stock Exchanges, nor do the Stock Exchanges in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum, nor do the Stock Exchanges warrant that the Issuer s Debentures will be listed or will continue to be listed on the Stock Exchanges; nor do the Stock Exchanges take any responsibility for the soundness of the financial and other conditions of the Issuer, its promoters, its management or any scheme or project of the Issuer. DISCLAIMER CLAUSE OF THE SEBI As per the provisions of the SEBI Regulations, a copy of this Information Memorandum has not been filed with or submitted to the SEBI. It is to be distinctly understood that this Information Memorandum should not in any way be deemed or construed to have been approved or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any proposal for which the Debentures issued thereof is proposed to be made or for the correctness of the statements made or opinions expressed in this Information Memorandum. DISCLAIMER CLAUSE OF THE SOLE ARRANGER The Issuer has prepared this Information Memorandum based on the terms set out herein and the Issuer is solely responsible for its contents and such information has not been independently verified by the Sole Arranger. To the fullest extent permitted by law, no representation or warranty, expressed or implied, is or will be made, and no responsibility or liability is or will be accepted, by the Sole Arranger, any of its directors, employees or its affiliates for the accuracy, completeness, reliability, correctness or fairness of this Information Memorandum or any of the information or opinions contained therein, nor does it take responsibility for the financial condition, prospects, status and affairs of the Issuer, its promoters, its management or any scheme or project of the company. The Sole Arranger hereby expressly disclaims, to the fullest extent permitted by law, any responsibility for the contents of this Information Memorandum and any liability, whether arising in tort or contract or otherwise, relating to or resulting from this Information Memorandum or any information or errors contained therein or any omissions therefrom. By accepting this Information Memorandum, the Investor agrees that the Sole Arranger or any of its directors, employees, affiliates or representatives do not accept any responsibility and/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any of the information contained in this Information Memorandum. The Investor should carefully read and retain this Information Memorandum. However, the Investor should not construe the contents of this Information Memorandum as investment, legal, accounting, regulatory or tax advice, and the Investor should consult with its own advisors as to all legal, accounting, regulatory, tax, financial and related matters concerning an investment in the Debentures. By accepting this Information Memorandum, you acknowledge that (a) the Sole Arranger is not providing advice, (whether in relation to legal, tax or accounting issues or otherwise), (b) you understand that there may be legal, tax, accounting and/or other risks associated with the potential transaction. 7

8 This Information Memorandum is not intended to be (and should not be used as) the basis of any credit analysis or other evaluation and should not be considered as a recommendation by the Sole Arranger or any other person that any recipient participates in the Issue or advice of any sort. It is understood that each recipient of this Information Memorandum will perform its own independent investigation and credit analysis of the proposed financing and the business, operations, financial condition, prospects, creditworthiness, status and affairs of the Issuer, based on such information and independent investigation as it deems relevant or appropriate and without reliance on the Sole Arranger or on this Information Memorandum. DISCLAIMER OF THE DEBENTURE TRUSTEE The Issuer confirms that all necessary disclosures have been made in the Information Memorandum including but not limited to statutory and other regulatory disclosures. Investors should carefully read and note the contents of the Information Memorandum. Each prospective Investor should make its own independent assessment of the merit of the investment in the Debentures and the Issuer. Prospective Investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyze such investment and suitability of such investment to such Investor s particular circumstance. Prospective Investors are required to make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in such instruments. The Debenture Trustee, ipso facto does not have the obligations of a borrower or a principal debtor or a guarantor as to the monies paid/invested by Investors for the Debentures. DISCLAIMER IN RESPECT OF JURISDICTION This Issue is made in India to Investors as specified under the paragraph titled Eligible Investors on page 73 of this Information Memorandum, who shall be specifically approached by the Issuer. This Information Memorandum does not constitute an offer to sell or an invitation to subscribe to Debentures offered hereby to any person to whom it is not specifically addressed. Any disputes arising out of this Issue will be subject to the exclusive jurisdiction of the courts and tribunals at Mumbai. This Information Memorandum does not constitute an offer to sell or an invitation to subscribe to the Debentures herein, in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. DISCLAIMER IN RESPECT OF RATING AGENCY Ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. The Rating Agency has based its ratings on information obtained from sources believed by it to be accurate and reliable. The Rating Agency does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by the Rating Agency have paid a credit rating fee, based on the amount and type of bank facilities/instruments. 8

9 RISK FACTORS An investment in Debentures involves risks. These risks may include, among others, equity market, bond market, interest rate, market volatility and economic, political and regulatory risks and any combination of these and other risks. Some of these are briefly discussed below. Potential Investors and subsequent purchasers of the Debentures should be experienced with respect to transactions in instruments such as the Debentures. Potential Investors and subsequent purchasers of the Debentures should understand the risks associated with an investment in the Debentures and should only reach an investment decision after careful consideration, with their legal, tax, accounting and other advisers, of (a) the suitability of an investment in the Debentures in the light of their own particular financial, tax and other circumstances and (b) the information set out in this Information Memorandum. The Debentures may decline in value and marketability and Investors should note that, whatever their investment in the Debentures, the cash amount due at maturity will be equivalent to the face value of the Debentures. More than one risk factor may have simultaneous effect with regard to the Debentures such that the effect of a particular risk factor may not be predictable. In addition, more than one risk factor may have a compounding effect which may not be predictable. No assurance can be given as to the effect that any combination of risk factors may have on the value of the Debentures. 1. Early Termination for Extraordinary Reasons, Illegality and Force Majeure If the Issuer determines that, for reasons beyond its control, the performance of its obligations under the Debentures has become illegal or impractical in whole or in part for any reason, the Issuer may, at its discretion and without obligation, redeem the Debentures early. 2. Taxation Potential purchasers and sellers of the Debentures should be aware that they may be required to pay stamp duties or other documentary charges/taxes in accordance with the laws and practices of India. Payment and/or delivery of any amount due in respect of the Debentures will be conditional upon the payment of all applicable taxes, duties and/or expenses. Potential Investors who are in any doubt as to their tax position should consult their own independent tax advisers. In addition, potential Investors should be aware that tax regulations and their application by the relevant taxation authorities change from time to time. Accordingly, it is not possible to predict the precise tax treatment which will apply at any given time. 3. Interest Rate Risk All securities where a fixed rate of interest is offered, such as the Company s Debentures, are subject to price risk. The price of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The extent of fall or rise in the prices is a function of the existing coupon, days to maturity and the increase or decrease in the level of prevailing interest rates. Increased rates of interest, which frequently accompany inflation and/or a growing economy, are likely to have a negative effect on the price of the Company s Debentures. 4. The Debentures may be Illiquid It is not possible to predict if and to what extent a secondary market may develop in the Debentures or at what price the Debentures will trade in the secondary market or whether such market will be liquid or illiquid. If so specified in this Information Memorandum, application has been made to list or quote or admit to trading the Debentures on the stock exchange or quotation system(s) specified. If the Debentures are so listed or quoted or admitted to trading, no assurance is given that any such listing or quotation or admission to trading will be 9

10 maintained. The fact that the Debentures may be so listed or quoted or admitted to trading does not necessarily lead to greater liquidity than if they were not so listed or quoted or admitted to trading. The listing of the Debentures is subject to receipt of the final listing and trading approval from the Stock Exchange. The Issuer may, but is not obliged to, at any time purchase the Debentures at any price in the open market or by tender or private agreement. Any Debentures so purchased may be resold or surrendered for cancellation. The more limited the secondary market is, the more difficult it may be for holders of the Debentures to realise value for the Debentures prior to redemption of the Debentures. 5. Downgrading in credit rating The Debentures have been rated by Credit Analysis & Research Limited (CARE) as having CARE AA+ rating for the issuance of Debentures for an aggregate amount of `3 Crores (Rupees Three Hundred Crores only). The Issuer cannot guarantee that this rating will not be downgraded. Such a downgrade in the credit rating may lower the value of the Debentures. 6. Future legal and regulatory obstructions Future government policies and changes in laws and regulations in India and comments, statements or policy changes by any regulator, including but not limited to the SEBI or the RBI, may adversely affect the Debentures. The timing and content of any new law or regulation is not within the Issuer s control and such new law, regulation, comment, statement or policy change could have an adverse effect on market for and the price of the Debentures. Further, the RBI or other regulatory authorities may require clarifications on this Information Memorandum, which may cause a delay in the issuance of Debentures or may result in the Debentures being materially affected or even rejected. Risk Associated with TML s Business and the Automotive Industry Deterioration in global economic conditions could have a material adverse impact on the Company s sales and results of operations. The automotive industry and the demand for automobiles are influenced by general economic conditions, including, among other things, rates of economic growth, credit availability, disposable income of consumers, interest rates, environmental and tax policies, safety regulations, freight rates and fuel and commodity prices. Negative trends in any of these factors impacting the regions where the Company operates could materially and adversely affect the Company s business, financial condition and results of operations. The Indian automotive industry is materially affected by the general economic conditions in India and around the world. Muted industrial growth in India in recent years along with continuing higher inflation and interest rates continue to pose risks to overall growth in this market. The automotive industry in general is cyclical and economic slowdowns in the recent past have affected the manufacturing sector in India, including the automotive and related industries. A continuation of negative economic trends or further deterioration in key economic metrics such as the growth rate, interest rates and inflation as well as reduced availability of financing for vehicles at competitive rates could materially and adversely affect the Company s automotive sales in India and results of operations. In addition, the Indian automotive market and the Indian economy are influenced by economic and market conditions in other countries. Although economic conditions are different in each country, investors reactions to economic developments in one country can have adverse effects on the securities of companies and the economy as a whole in other countries, including India. A loss of investor confidence in the financial systems 1

11 of other emerging markets may cause volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy, including the movement of exchange rates and interest rates in India. A slower than expected global economic recovery or a significant financial disruption could have a material adverse effect on the Company s cost of funding, portfolio of financing loans, business, prospects, results of operations and financial condition. The Company s Jaguar Land Rover business has significant operations in the United Kingdom, North America, continental Europe and China as well as sales operations in many major countries across the globe. While the automotive market in the United States, United Kingdom and Europe experienced healthy growth in Fiscal 215, headwinds remain. Low economic growth in the Eurozone prompted the European Central Bank to engage in quantitative easing beginning in January 215, and uncertainty over debt negotiations with Greece remains. Economic sanctions and declining energy prices continue to impact Russia. Recessionary concerns are mounting in Brazil whereas China s economy is showing signs of slowing. Jaguar Land Rover s ambitions for growth in emerging markets such as China, India, Russia and Brazil, may not materialise as expected, which could have a significant adverse impact on the Company s financial performance. If automotive demand softens because of lower or negative economic growth in key markets (notably China) or other factors, the Company s operations and financial condition could be materially and adversely affected. Restrictive covenants in financing agreements may limit the Company s operations and financial flexibility and materially and adversely impact the Company s financial condition, results of operations and prospects. Some of the Company s financing agreements and debt arrangements set limits on or require it to obtain lender consent before, among other things, pledging assets as security. In addition, certain financial covenants may limit the Company s ability to borrow additional funds or to incur additional liens. In the past, the Company has been able to obtain required lender consent for such activities. However, there can be no assurance that it will be able to obtain such consents in the future. If the Company s liquidity needs, or growth plans, require such consents and such consents are not obtained, it may be forced to forego or alter plans, which could materially and adversely affect the Company s financial condition and results of operations. If the Company breaches its financing agreements, the outstanding amounts due thereunder could become due and payable immediately or result in increased costs. A default under one of these agreements may also result in cross-defaults under other financing agreements and result in the outstanding amounts under such other financing agreements becoming due and payable immediately. The Company s lenders and guarantors could impose additional operating and financial restrictions on the Company, or otherwise seek to modify the terms of its existing financial agreements. This could have a material adverse effect on the Company s financial condition and results of operations. In Fiscal 214, the Company had been in breach of financial covenants relating to the ratio of total outstanding liabilities to tangible net worth, and to the debt service coverage ratio in various financing agreements. The Company requested and obtained waivers of its obligations from the lenders and guarantors to pay additional costs as a consequence of such breaches. These breaches have not resulted in an event of default in the Company s financing agreements or the payment of penalties. In Fiscal 215, the Company has prepaid the above borrowings and hence there has not been any breach of financial covenants. However, there can be no assurances that the Company will succeed in obtaining consents or waivers in the future from its lenders or guarantors in the future, and future non-compliance with the financial covenants contained in the Company s financial agreements may lead to increased cost for future financings. Exchange rate and interest rate fluctuations could materially and adversely affect the Company s financial condition and results of operations. The Company s operations are subject to risks arising from fluctuations in exchange rates with reference to countries in which the Company operates. The Company imports capital equipment, raw materials and 11

12 components from, manufactures vehicles in, and sells vehicles in various countries, and therefore the Company s revenues and costs have significant exposure to the relative movements of the GBP, the US dollar, the Euro and the Indian rupee. Moreover, the Company has outstanding foreign currency denominated debt and is sensitive to fluctuations in foreign currency exchange rates. The Company has experienced and expects to continue to experience foreign exchange losses and gains on obligations denominated in foreign currencies in respect of the Company s borrowings and foreign currency assets and liabilities due to currency fluctuations. The Company also has interest-bearing assets (including cash balances) and interest-bearing liabilities, which bear interest at variable rates. The Company is therefore exposed to changes in interest rates in the various markets in which it borrows. Although the Company manages its interest and foreign exchange exposure through the use of financial hedging instruments such as forward contracts, swap agreements and option contracts, higher interest rates and foreign exchange volatility could significantly increase the Company s cost of borrowing, which could have a material adverse effect on its financial condition, results of operations and liquidity. Intensifying competition could materially and adversely affect the Company s sales, financial conditions and results of operations. The global automotive industry is highly competitive and competition is likely to further intensify in light of continuing globalisation and consolidation in the worldwide automotive industry. Competition is especially likely to increase in the premium automotive categories as each market participant intensifies its efforts to retain its position in established markets while also expanding in emerging markets, such as China, India, Russia, Brazil and parts of Asia. Factors affecting competition include product quality and features, innovation and the timing of the introduction of new products, cost control, pricing, reliability, safety, fuel economy, environmental impact (and perception thereof), customer service and financing terms. There can be no assurance that the Company will be able to compete successfully in the global automotive industry in the future. The Company also faces strong competition in the Indian market from domestic as well as foreign automobile manufacturers. Improving infrastructure and robust growth prospects compared to other mature markets have attracted a number of international companies to India either through joint ventures with local partners or through independently owned operations in India. International competitors bring with them decades of international experience, global scale, advanced technology and significant financial resources. Consequently, domestic competition is likely to further intensify in the future. There can be no assurance that the Company will be able to implement future strategies in a way that will mitigate the effects of increased competition in the Indian automotive industry. Designing, manufacturing and selling vehicles is capital intensive and requires substantial investments in manufacturing, machinery, research and development, product design, engineering, technology and marketing in order to meet both customer preferences and regulatory requirements. If competitors consolidate or enter into other strategic agreements, they may be able to take better advantage of economies of scale or enhance their competitiveness in other ways. Competitors may also be able to benefit from the cost savings offered by consolidation or alliances, which could adversely affect the Company s competitiveness with respect to those competitors, which could also materially reduce the Company s sales as well as materially and adversely affect its business, financial condition and results of operations. The Company s future success depends on its ability to satisfy changing customer demands by offering innovative products in a timely manner and maintaining such products competitiveness and quality. The Company s competitors may gain significant advantages if they are able to offer products satisfying customer needs earlier than the Company is able to, which could adversely impact, the Company s sales and 12

13 profitability. Unanticipated delays or cost overruns in implementing new product launches, expansion plans or capacity enhancements could also adversely impact the Company s results of operations. Customer preferences, especially in many of the developed markets, seem to be moving in favour of more fuelefficient and environmentally-friendly vehicles. Increased government regulation, rising fuel prices, and evolving environmental preferences of consumers has brought significant pressure on the automotive industry to reduce CO2 emissions. The Company s operations may be significantly impacted if it experiences delays in developing fuel-efficient products that reflect changing customer preferences. In addition, deterioration in the quality of vehicles could force the Company to incur substantial cost and damage to its reputation. There can be no assurance that the market acceptance of the Company s future products will meet sales expectations, in which case the Company may be unable to realise the intended economic benefits of the investments, and its revenues and profitability may decrease materially. Private and commercial users of transportation increasingly use modes of transportation other than the automobile. The reasons for this include the rising costs of automotive transport, increasing traffic density in major cities and environmental awareness. Furthermore, the increased use of car-sharing concepts and other innovative mobility initiatives facilitates access to other methods of transport, thereby reducing dependency on the private automobile. A shift in consumer preferences away from private automobiles would have a material adverse effect on the Company s general business activity and on its sales, financial position and results of operations as well as prospects. To stimulate demand, competitors in the automotive industry have offered customers and dealers price reductions on vehicles and services, which has led to increased price pressures and sharpened competition within the industry. As a provider of numerous high volume models, the Company s profitability and cash flows are significantly affected by the risk of rising competitive and price pressures. Special sales incentives and increased price pressures in the new car business also influence price levels in the used car market, with a negative effect on vehicle resale values. This may have a negative impact on the profitability of the used car business in the Company s dealer organisation. The Company is subject to risks associated with product liability warranties and recalls. Should it supply defective products, parts, or related after-sales services, the Company is subject to risks and costs associated with product liability, including negative publicity, which may have a material adverse effect on the Company s business, financial conditions and results of operations. These events could also require the Company to spend considerable resources in correcting these problems and could significantly reduce demand for the Company s products. In Fiscal 215, the Company implemented product recalls for Jaguar Land Rover vehicles sold in North America and China. The Company may also be subject to class actions or other largescale product liability or other lawsuits in various jurisdictions where it has a presence. The Company is subject to risks associated with the automobile financing business. The Company is subject to risks associated with its automobile financing business in India. In Fiscal 215, the market share of the Company s automobile financing business, which supports sales of the Company vehicles, declined to 24.% from 3.% in Fiscal 214. Any default by the Company s customers or inability to repay instalments as due could materially and adversely affect the Company s business, financial condition, results of operations and cash flows. The sale of the Company s commercial and passenger vehicles is heavily dependent on funding availability for the customers. Rising delinquencies and early defaults have contributed to a reduction in automobile financing, which, in turn, has had an adverse effect on funding availability for potential customers. This reduction in available financing may continue in the future and have a material adverse effect on the Company s business, financial condition and results of operations. Any significant declines in used car valuations could materially and adversely affect the Company s sales, financial condition and results of operations. Over time, and particularly in the event of any credit rating 13

14 downgrade, market volatility, market disruption, regulatory changes or otherwise, the Company may need to reduce the amount of financing receivables that it originates, which could severely disrupt the Company s ability to support the sale of its vehicles. Underperformance of the Company s distribution channels and supply chains may have a material adverse effect on the Company s sales, financial condition and results of operations. The Company s products are sold and serviced through a network of authorised dealers and service centres across the domestic market and via a network of distributors and local dealers in international markets. The Company monitors the performance of its dealers and distributors and provides them with support to enable them to perform to the Company s expectations. There can be no assurance, however, that these expectations will be met. Any underperformance by the Company dealers or distributors could adversely affect the Company s sales and results of operations. The Company relies on third parties to supply raw materials, parts and components used in the manufacture of products. For some of these parts and components, the Company is dependent on a single source. The Company s ability to procure supplies in a cost effective and timely manner is subject to various factors, some of which are not within its control. While the Company manages its supply chain as part of the vendor management process, any significant problems with supply chain in the future could disrupt its business and materially affect the results of operations as well as its sales and net income. Natural disasters and man-made accidents, adverse economic conditions, a decline in automobile demand, a lack of access to sufficient financing arrangements, among others things, could have a negative financial impact on the Company s suppliers, thereby impairing timely availability of components to the Company or causing increases in the costs of components. Similarly, impairments to the financial condition of the Company s distributors for any reason may adversely impact the Company s performance. In addition, if one or more of the other global automotive manufacturers were to become insolvent, this would have an adverse effect on the Company s supply chains and may have a material adverse effect on the Company s results of operations. Increases in input prices may have a material adverse effect on the Company results of operations. In Fiscal 215 and Fiscal 214, the consumption of raw materials, components and aggregates and purchase of products for sale (Consolidated) approximately 6.9% and 61.7%, respectively, of the Company s total revenues. Prices of commodity items used in manufacturing automobiles, including steel, aluminium, copper, zinc, rubber, platinum, palladium and rhodium, have become increasingly volatile in recent years. Further price movements would closely depend on the evolving economic scenarios across the globe. While the Company continues to pursue cost-reduction initiatives, an increase in the price of input materials could severely impact its profitability, to the extent such increase cannot be absorbed by the market through price increases and/or could have a negative impact on demand. In addition, an increased price and supply risk could arise from the need for rare and frequently sought-after raw materials for which demand is high, such as rare earths, which are predominantly found in China. Rare earth metal prices and supply remain uncertain. In the past, China has limited the export of rare earths from time to time. Due to intense price competition and the Company s high level of fixed costs, the Company may not be able to adequately address changes in commodity prices even if they are foreseeable. Increases in fuel costs also pose a significant challenge, especially in the commercial and premium vehicle categories where increased fuel prices have an impact on demand. If the Company is unable to find substitutes for supplies of raw materials, pass price increases on to customers or safeguard the supply of scarce raw materials, the Company s vehicle production, business and results from operations could be affected. Deterioration in the performance of any of the subsidiaries, joint ventures and affiliates may adversely the Company s results of operations. 14

15 The Company has made and may continue to make capital commitments to its subsidiaries, joint ventures and affiliates. If the business or operations of any of these subsidiaries, joint ventures and affiliates deteriorates, the value of the Company s investments may decline substantially. The Company is also subject to risks associated with joint ventures and affiliates wherein the Company retains only partial or joint control. The Company s partners may be unable or unwilling to fulfil their obligations, or the strategies of the Company s joint ventures or affiliates may not be implemented successfully, any of which may materially reduce the value of the Company investments, which may in turn have a material adverse effect on the Company s reputation, business, financial position or results of operations. The Company is subject to risks associated with growing the business through mergers and acquisitions. The Company believes that acquisitions provide it opportunities to grow significantly in the global automobile markets by offering premium brands and products. Acquisitions have provided it with access to technology and additional capabilities while also offering potential synergies. However, the scale, scope and nature of the integration required in connection with acquisitions presents significant challenges, and the Company may be unable to integrate relevant subsidiaries, divisions and facilities effectively within the expected schedule. An acquisition may not meet the Company s expectations and the realisation of the anticipated benefits may be blocked, delayed or reduced as a result of numerous factors, some of which are outside the Company s control. For example, the Company acquired the Jaguar Land Rover business from Ford Motor Company in June 28, and Jaguar Land Rover has become a significant part of the Company s business and accounted for approximately 86% of its total revenues for Fiscal 215. As a result of the acquisition, the Company is responsible for, among other things, the obligations and liabilities associated with the legacy business of Jaguar Land Rover. There can be no assurances that any legacy issues at Jaguar Land Rover or any other acquisition the Company has undertaken in the past or will undertake in the future would not have a material adverse effect on its business, financial condition and results of operations, as well as its reputation and prospects. The Company will continue to evaluate growth opportunities through suitable mergers and acquisitions in the future. Growth through mergers and acquisitions involves business risks, including unforeseen contingent risks or latent business liabilities that may only become apparent after the merger or acquisition is completed. The key success factors are seamless integration, effective management of the merged and/or acquired entity, retention of key personnel, cash flow generation from synergies in engineering and sourcing, joint sales and marketing efforts, and management of a larger business. If any of these factors fails to materialise or if the Company is unable to manage any of the associated risks successfully, the Company s business, financial condition and results of operations could be materially and adversely affected. The automobile business is seasonal in nature and substantial decrease in sales during certain quarters could have a material adverse impact on the Company s financial performance. The sales, volumes and prices for the Company vehicles are influenced by the cyclicality and seasonality of demand for these products. The automotive industry has been cyclical in the past and the Company expects this cyclicality to continue. In the Indian market, demand for the Company s vehicles generally peaks between January and March, although there is a decrease in demand in February just before release of the Indian fiscal budget. Demand is usually lean from April to July and picks up again in the festival season from September onwards, with a decline in December due to year end. The resulting sales and cash flow profile influences operating results on a quarter to quarter basis. The Company s business and operations could be materially and adversely affected by labour unrest. All of the Company s permanent employees in India, other than officers and managers, and most of the permanent employees in South Korea and the United Kingdom, including certain officers and managers, in 15

16 relation to the Company automotive business, are members of labour unions and are covered by wage agreements, where applicable, with those labour unions. In general, the Company considers labour relations with all of its employees to be good. However, in the future, the Company may be subject to labour unrest, which may delay or disrupt the operations in the affected regions, including the acquisition of raw materials and parts, the manufacture, sales and distribution of products and the provision of services. If work stoppages or lockouts at the Company facilities or at the facilities of the Company major vendors occur or continue for a long period of time, the Company s business, financial condition and results of operations could be materially and adversely affected. The Company s business could be negatively affected by the actions of activist shareholders. Certain of the Company s shareholders may from time to time advance shareholder proposals or otherwise attempt to effect changes or acquire control over the Company s business. Campaigns by shareholders to effect changes at publicly listed companies are sometimes led by investors seeking to increase short-term shareholder value by advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases or even sales of assets or the entire company, or by voting against proposals put forward by the board of directors and management of the company. If faced with actions by activist shareholders, the Company may not be able to respond effectively to such actions, which could be disruptive to the Company s business. The Company may have to comply with more stringent foreign investment norms in the event of an increase in shareholding of non-residents or if the Company is considered as engaged in a sector in which foreign investment is restricted. Indian companies, which are owned or controlled by non-resident persons, are subject to investment restrictions specified in the Consolidated FDI (Foreign Direct Investment) Policy, or the Consolidated FDI Policy. Under the Consolidated FDI Policy, an Indian company is considered to be owned by non-resident persons if more than 5% of its equity interest is beneficially owned by non-resident persons. The non-resident equity shareholding in the Company may, in the near future, exceed 5%, thereby resulting in the Company being considered as being owned by non-resident entities under the Consolidated FDI Policy. In such an event, any investment by the Company in existing subsidiaries, associates or joint ventures and new subsidiaries, associates or joint ventures will be considered as indirect foreign investment and shall be subject to various requirements specified under the Consolidated FDI Policy, including sectoral limits, approval requirements and pricing guidelines, as may be applicable. Furthermore, as part of its automotive business, the Company supplies and has in the past supplied vehicles to Indian military and paramilitary forces and, in the course of such activities has obtained an industrial license from the Department of Industrial Policy. The Consolidated FDI policy applies different foreign investment restrictions to companies based upon the sector in which they operate. While the Company believes it is an automobile company by virtue of the significance of its automobile operations, in the event that foreign investment regulations applicable to the defence sector (including under the Consolidated FDI Policy) are made applicable to the Company, the Company may face more stringent foreign investment restrictions and other compliance requirements compared to those applicable to it presently, which in turn could materially affect the Company s business, financial condition and results of operations. The Company s business and prospects could suffer if the Company loses one or more key personnel or if it is unable to attract and retain its employees. The Company s business and future growth depend largely on the skills of its workforce, including executives and officers, and automotive designers and engineers. The loss of the services of one or more of the Company s personnel could impair its ability to implement its business strategy. In view of intense competition, any 16

17 inability to continue to attract, retain or motivate the workforce could materially and adversely affect the Company s business, financial condition, results of operations and prospects. Future pension obligations may prove more costly than currently anticipated and the market value of assets in the Company s pension plans could decline. The Company provides post-retirement and pension benefits to its employees, including defined benefit plans. The Company s pension liabilities are generally funded. However, lower returns on pension fund assets, change in market conditions, interest rates or inflation rates, and adverse changes in other critical actuarial assumptions may impact the Company s pension liabilities or assets and consequently increase funding requirements, which could materially decrease the Company s net income and cash flows. Any inability to manage the Company s growing international business may materially and adversely affect its financial condition and results of operations. The Company s growth strategy relies on the expansion of the Company s operations by introducing certain automotive products in markets outside India, including Europe, China, Russia, Brazil, the United States, Africa and other parts of Asia. The costs associated with entering and establishing the Company in new markets, and expanding such operations, may be higher than expected, and the Company may face significant competition in those regions. In addition, the Company s international business is subject to many actual and potential risks and challenges, including language barriers, cultural differences and other difficulties in staffing and managing overseas operations, inherent difficulties and delays in contract enforcement and collection of receivables under the legal systems of some foreign countries, the risk of non-tariff barriers, other restrictions on foreign trade or investment sanctions, and the burdens of complying with a wide variety of foreign laws, rules and regulations. As part of its global activities, the Company may engage with third-party dealers and distributors which it does not control but which nevertheless take actions that could have a material adverse impact on the Company reputation and business. In addition, the Company cannot assure you that it will not be held responsible for any activities undertaken by such dealers and distributors. If the Company is unable to manage the risks related to its expansion and growth in other parts of the world, the Company s business, financial condition and results of operations could be materially and adversely affected. The Company has a limited number of manufacturing, design, engineering and other facilities, and any disruption in the operations of these facilities could materially and adversely affect the Company s business, financial condition and results of operations. The Company has manufacturing facilities and design and engineering centres in India, the United Kingdom, China, South Korea, Thailand, South Africa and Brazil, and has established a presence in Indonesia. The Company could experience disruptions to its manufacturing, design and engineering capabilities for a variety of reasons, including, among others, extreme weather, fi re, theft, system failures, natural catastrophes, mechanical or equipment failures and similar events. Any such disruptions could affect the Company s ability to design, manufacture and sell its products. If any of these events were to occur, there can be no assurance that the Company would be able to shift its design, engineering or manufacturing operations to alternate sites in a timely manner or at all. Any such disruption could materially and adversely affect the Company s business, financial condition and results of operations. The Company relies on licensing arrangements with Tata Sons Limited to use the Tata brand. Any improper use of the associated trademarks by the Company s licensor or any other third parties could materially and adversely affect the Company s business, financial condition and results of operations. The Company s rights to its trade names and trademarks are a crucial factor in marketing its products. Establishment of the Tata word mark and logo mark, in and outside India, is material to the Company s operations. The Company has licensed the use of the Tata brand from its promoter, Tata Sons Limited. If its promoter, or any of its subsidiaries or affiliated entities, or any third party uses the trade name Tata in ways 17

18 that adversely affect such trade name or trademark, the Company s reputation could suffer damage, which in turn could have a material adverse effect on the Company s business, financial condition and results of operations. The Company is exposed to operational risks, including risks in connection with the Company s use of information technology. Operational risk is the risk of loss resulting from inadequate or failed internal systems and processes, from either internal or external events. Such risks could stem from inadequacy or failures of controls within internal procedures, violations of internal policies by employees, disruptions or malfunctioning of information technology systems such as computer networks and telecommunication systems, other mechanical or equipment failures, human error, natural disasters or malicious acts by third parties. Any unauthorised access to or misuse of data on the Company s information technology systems, human errors or technological or process failures of any kind could severely disrupt the Company s operations, including its manufacturing, design and engineering processes, and could have a material adverse effect on the Company financial condition and results of operations. The Company may be materially and adversely affected by the divulgence of confidential information. Although the Company has implemented policies and procedures to protect confidential information such as key contractual provisions, future projects, and customer records, such information may be divulged, including as a result of hacking or other threats from cyberspace. If this occurs, the Company could be subject to claims by affected parties, negative publicity and loss of proprietary information, all of which could have an adverse and material impact on the Company s business, financial conditions, results of operations and cash flows. Any failures or weaknesses in the Company s internal controls could materially and adversely affect the Company financial condition and results of operations. Upon an evaluation of the effectiveness of the design and operation of the Company s internal controls in the annual report on Form 2- F filed with the SEC for the year ended March 31, 214, the Company concluded that there was a material weakness such that the Company internal controls over financial reporting were not effective as at March 31, 214. Although the Company has instituted remedial measures to address the material weakness identified and continually review and evaluate its internal control systems to allow management to report on the sufficiency of the Company s internal controls, the Company cannot assure you that it will not discover additional weaknesses in the Company internal controls over financial reporting. Any such additional weaknesses or failure to adequately remediate any existing weakness could materially and adversely affect the Company s financial condition or results of operations and the Company s ability to accurately report its financial condition and results of operations in a timely and reliable manner. Inability to protect or preserve intellectual property could materially and adversely affect the Company s business, financial condition and results of operations. The Company owns or otherwise has rights in respect to a number of patents relating to the products the Company manufactures. In connection with the design and engineering of new vehicles and the enhancement of existing models, the Company seeks to regularly develop new intellectual property. The Company also uses technical designs which are the intellectual property of third parties with such third parties consent. These patents and trademarks have been of value in the growth of the Company s business and may continue to be of value in the future. Although the Company does not regard any of the Company s businesses as being dependent upon any single patent or related group of patents, an inability to protect this intellectual property generally, or the illegal breach of some or a large group of the Company s intellectual property rights, would have a materially adverse effect on the Company s business, financial condition and results of operations. The Company may also be affected by restrictions on the use of intellectual property rights held by third parties and it may be held legally liable for the infringement of the intellectual property rights of others in its products. 18

19 The Company s insurance coverage may not be adequate to protect the Company against all potential losses to which the Company may be subject, and this may have a material adverse effect on the Company s business, financial condition and results of operations. While the Company believes that the insurance coverage that it maintains is reasonably adequate to cover all normal risks associated with the operation of its business, there can be no assurance that its insurance coverage will be sufficient, that any claim under such insurance policies will be honoured fully or timely, or that the insurance premiums will not increase substantially. Accordingly, to the extent that the Company suffers loss or damage that is not covered by insurance or which exceeds its insurance coverage, or is required to pay higher insurance premiums, the Company s business, financial condition and results of operations may be materially and adversely affected. Impairment of intangible assets may have a material adverse effect on the Company s results of operations. Designing, manufacturing and selling vehicles is capital intensive and requires substantial investments in intangible assets like research and development, product design and engineering technology. The Company reviews the value of its intangible assets on an annual basis to assess whether the carrying amount matches the recoverable amount for the asset concerned based on underlying cash generating units. The Company may have to take an impairment loss as of the current balance sheet date or a future balance sheet date, if the carrying amount exceeds the recoverable amount, which could have a material adverse effect on the Company financial condition and results of operations. The Company requires certain approvals or licenses in the ordinary course of business, and the failure to obtain or retain them in a timely manner, or at all, may adversely affect its operations. The Company requires certain statutory and regulatory permits, licenses and approvals to carry out its business operations and applications for their renewal need to be made within certain time frames. For some of the approvals which may have expired, the Company has either made or is in the process of making an application for obtaining the approval or its renewal. While the Company has applied for renewal for a few of these approvals, registrations and permits, the Company cannot assure you that it will receive these approvals and registrations in a timely manner or at all. The Company can make no assurances that the approvals, licenses, registrations and permits issued to the Company would not be suspended or revoked in the event of noncompliance or alleged non-compliance with any terms or conditions thereof, or pursuant to any regulatory action. Furthermore, if the Company is unable to renew or obtain necessary permits, licenses and approvals on acceptable terms in a timely manner, or at all, the Company s business, financial condition and operations may be adversely affected. Political and Regulatory Risks India s obligations under the World Trade Organisation Agreement could materially affect the Company s business. India s obligations under its World Trade Organization agreement could reduce the present level of tariff s on imports of components and vehicles. Reductions of import tariff s could result in increased competition, which, in turn, could materially and adversely affect the Company s business, financial condition and results of operations. Compliance with new and current laws, rules, regulations and government policies regarding increased fuel economy, reduced greenhouse gas and other emissions, vehicle safety, taxes and pricing policies in the automotive industry significantly increase the Company s costs and materially decrease its net income. As an automobile company, the Company is subject to extensive governmental regulations regarding vehicle emissions levels, noise and safety, and levels of pollutants generated by its production facilities. These 19

20 regulations are likely to become more stringent, and the resulting higher compliance costs may significantly impact the Company s future results of operations. In particular, the United States and Europe have stringent regulations relating to vehicle emissions. The proposed tightening of vehicle emissions regulations by the European Union will require significant costs for compliance. In addition, a number of further legislative and regulatory measures to address greenhouse emissions, including national laws, and the Kyoto Protocol, are in various phases of discussion and implementation. In order to comply with current and future safety and environmental norms, the Company may have to incur additional costs to (i) operate and maintain its production facilities, (ii) install new emissions controls or reduction technologies, (iii) purchase or otherwise obtain allowances to emit greenhouse gases, (iv) administer and manage the Company s greenhouse gas emissions program, and (v) invest in research and development to upgrade products and manufacturing facilities. If the Company is unable to develop commercially viable technologies or is otherwise unable to attain compliance within the time frames set by new standards, the Company could face significant civil penalties or be forced to restrict product offerings drastically. Moreover, safety and environmental standards may at times impose conflicting imperatives, which pose engineering challenges and would, among other things, increase the Company s costs. While the Company is pursuing the development and implementation of various technologies in order meet the required standards in the various countries in which the Company sells its vehicles, the costs for compliance with these required standards could be significant to its operations and may materially and adversely affect the Company s business, financial condition and results of operations. Imposition of any additional taxes and levies designed to limit the use of automobiles could significantly reduce the demand for the Company s products as well as its sales and net income. Changes in corporate and other taxation policies as well as changes in export and other incentives offered by the various governments could also materially and adversely affect the Company s financial condition and results of operations. For example, the Company currently benefits from excise duty exemptions for manufacturing facilities in the State of Uttarakhand and other incentives such as subsidies or loans from states where the Company has manufacturing operations. The Government of India has proposed a comprehensive national goods and services tax, or GST, regime that would combine taxes and levies by the central and state Governments into one unified rate structure. While both the Government of India and other state governments of India have publicly announced that all committed incentives will be protected following the implementation of the GST, given the limited availability of information in the public domain concerning the GST, the Company is unable to provide any assurance as to this or any other aspect of the tax regime following implementation of the GST. The implementation of this rationalised tax structure may be affected by any disagreement between certain state governments, which could create uncertainty. In addition, regulations in the areas of investments, taxes and levies may also have an impact on the price of the Company shares. The Company may be materially and adversely impacted by political instability, wars, terrorism, multinational conflicts, natural disasters, fuel shortages/prices, epidemics and labour strikes. The Company s products are exported to a number of geographical markets, and it plans to further expand international operations in the future. Consequently, the Company s operations in those foreign markets may be subject to political instability, wars, terrorism, regional or multinational conflicts, natural disasters, fuel shortages, epidemics and labour strikes. In addition, conducting business internationally, especially in emerging markets, exposes the Company to additional risks, including adverse changes in economic and government policies, unpredictable shifts in regulation, inconsistent application of existing laws, rules and regulations, unclear regulatory and taxation systems and divergent commercial and employment practices and procedures. Any significant or prolonged disruption or delay in the Company s operations related to these risks could materially and adversely affect its business, financial condition and results of operations. Compliance with new or changing corporate governance and public disclosure requirements adds uncertainty to the Company s compliance policies and increases compliance costs. 2

21 The Company is subject to a complex and changing regime of laws, rules, regulations and standards relating to accounting, corporate governance and public disclosure, including the Sarbanes-Oxley Act of 22 and SEC regulations, SEBI regulations, New York Stock Exchange listing rules and Indian stock market listing regulations. New or changed laws, rules, regulations and standards may lack specificity and are subject to varying interpretations. Their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. As an example, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 21, or the Dodd-Frank Act, which contains significant corporate governance and executive compensation related provisions, the SEC has adopted additional rules and regulations in areas such as say on pay. Similarly, under applicable Indian laws, for example, remuneration packages may in certain circumstances require shareholders approval. The Company s management and other personnel may be required to devote a substantial amount of time to such compliance initiatives. This could result in continuing uncertainty regarding compliance matters and higher costs of compliance as a result of ongoing revisions to such governance standards. The Company is committed to maintaining high standards of corporate governance and public disclosure. However, efforts to comply with evolving laws, rules, regulations and standards in this regard have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management resources and time. The Companies Act, 213 has effected significant changes to the existing Indian company law framework, which may subject the Company to higher compliance requirements and increase its compliance costs. A majority of the provisions and rules under the Companies Act, 213 have recently been notified and have come into effect from the date of their respective notification, resulting in the corresponding provisions of the Companies Act, 1956 ceasing to have effect. The Companies Act, 213 has brought into effect significant changes to the Indian company law framework, such as in the provisions related to the issue of capital (including provisions in relation to issue of securities on a private placement basis), disclosures in offering documents, corporate governance norms, accounting policies and audit matters, related party transactions, introduction of a provision allowing the initiation of class action suits in India against companies by shareholders or depositors, a restriction on investment by an Indian company through more than two layers of subsidiary investment companies (subject to certain permitted exceptions), prohibitions on loans to directors and insider trading and restrictions on forward dealing by directors and key management personnel. The Company is also required to spend, in each financial year, at least 2% of its average net profits during the three immediately preceding financial years towards corporate social responsibility activities. Furthermore, the Companies Act, 213 imposes greater monetary and other liability on the Company and its directors for any non-compliance. To ensure compliance with the requirements of the Companies Act, 213, the Company may need to allocate additional resources, which may increase its regulatory compliance costs and divert management s attention. Accordingly, the Company may face challenges in interpreting and complying with such provisions due to limited jurisprudence on them. In the event the Company s interpretation of the Companies Act, 213 differs from, or contradicts with, any judicial pronouncements or clarifications issued by the Government in the future, the Company may face regulatory actions or be required to undertake remedial steps. Additionally, some of the provisions of the Companies Act, 213 overlap with other existing laws and regulations (such as corporate governance norms and insider trading regulations issued by SEBI). Recently, SEBI issued revised corporate governance guidelines which became effective on October 1, 214. Pursuant to the revised guidelines, the Company is required to, among other things, ensure that there is at least one woman director on the Company Board of Directors at all times, establish a vigilance mechanism for directors and employees and reconstitute certain committees in accordance with the revised guidelines. The Company may face difficulties in complying with any such overlapping requirements. Further, the Company cannot currently determine the impact of certain provisions of the Companies Act, 213 and the revised SEBI corporate governance norms. Any increase in the Company compliance requirements or in the Company s compliance costs may have an adverse effect on the Company s business, financial condition and results of operations. The Company may be affected by competition law in India and any adverse application or interpretation of the Competition Act, 22 could adversely affect the Company s business. The Competition Act, 22 regulates practices having an appreciable adverse effect on competition, or AAEC, in a given relevant market in India. Under the Competition Act, 22, any formal or informal arrangement, 21

22 understanding or action in concert which causes or is likely to cause an AAEC is considered void and results in imposition of substantial penalties. Consequently, all agreements entered into by the Company could be within the purview of the Competition Act, 22. Further, any agreement among competitors which directly or indirectly involves determination of purchase or sale prices, limits or controls production, sharing the market by way of geographical area or number of subscribers in the relevant market or which directly or indirectly results in bid-rigging or collusive bidding is presumed to have an AAEC in the relevant market in India and is considered void. The Competition Act, 22 also prohibits abuse of a dominant position by any enterprise. The Company cannot predict with certainty the impact of the provisions of the Competition Act, 22 on its agreements at this stage. On March 4, 211, the Government issued and brought into force the combination regulation (merger control) provisions under the Competition Act, 22 with effect from June 1, 211. These provisions require acquisitions of shares, voting rights, assets or control or mergers or amalgamations that cross the prescribed asset- and turnover-based thresholds to be mandatorily notified to and preapproved by the Competition Commission of India ( CCI ). Additionally, on May 11, 211, the CCI issued Competition Commission of India (Procedure for Transaction of Business Relating to Combinations) Regulations, 211 (as amended), which sets out the mechanism for the implementation of the merger control regime in India. Further, the CCI has extraterritorial powers and can investigate any agreements, abusive conduct or combination occurring outside India if such agreement, conduct or combination has an AAEC in India. The CCI has initiated an enquiry against the Company and other car manufacturers collectively referred to hereinafter as the OEMs, pursuant to an allegation that genuine spare parts of automobiles manufactured by the OEMs were not made freely available in the open market in India and, accordingly, anti-competitive practices were carried out by the OEMs. If the Company is affected, directly or indirectly, by the application or interpretation of any provision of the Competition Act, or any enforcement proceedings initiated by the CCI, or any adverse publicity that may be generated due to scrutiny or prosecution by the CCI or if any prohibition or substantial penalties are levied under the Competition Act, 22, it would adversely affect the Company s business, financial condition and results of operations. Compliance with the SEC s rules for disclosures on conflict minerals may be time consuming and costly as well as result in reputational damage. Under the Dodd-Frank Act, the SEC has adopted rules that apply to companies that use certain minerals and metals, known as conflict minerals, in their products, including certain products manufactured for them by third parties. The rules require companies to conduct due diligence as to whether or not such minerals originated from the Democratic Republic of Congo or adjoining countries, and further require companies to fi le certain information with the SEC about the use of these minerals. The Company expects to incur additional costs to comply with these due diligence and disclosure requirements. In addition, depending on the Company s findings or its inability to make reliable findings about the source of any possible conflict minerals that may be used in any products manufactured for the Company by third parties, the Company s reputation could be harmed. The Company may be materially and adversely affected by RBI policies and actions. In June 215, after the RBI announced an interest rate cut coupled with a cautious statement on inflation, the Bombay Sensex dropped over six hundred (6) points, which may have impacted the price of the Company s shares or ADSs. The Company can make no assurances about future market reactions to RBI announcements and their impact on the price of its shares or ADSs. Furthermore, the Company s business could be significantly impacted were the RBI to make major alterations to monetary or financial policy. Certain changes, such as the raising of interest rates, could negatively affect the Company s sales and consequently its revenue, any of which could have a material adverse effect on the Company s financial condition. 22

23 The Indian Securities Market is volatile and could affect the Company s share prices. Indian stock exchanges, including the BSE, have, in the past, experienced substantial fluctuations in the prices of their listed securities. The problems, if they continue or recur, could affect the market price and liquidity of the securities of Indian companies. These problems have included temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. Furthermore, from time to time disputes have occurred between listed companies and stock exchanges and other regulatory bodies, which, in some cases, may have had a negative effect on market sentiment. SEBI received statutory powers in 1992 to assist it in carrying out its responsibility for improving disclosure and other regulatory standards for the securities markets. Subsequently, it has prescribed regulations and guidelines in relation to disclosure requirements, insider dealing and other matters relevant to the securities market. There may, however, not be an adequate level of information available about companies listed on the Indian stock exchanges. Political changes in India could delay and/or affect the further liberalisation of the Indian economy and materially and adversely affect economic conditions in India generally and the Company s business in particular. The Company s business could be significantly influenced by economic policies adopted by the Government of India. Since 1991, successive governments have pursued policies of economic liberalisation and financial sector reforms. The Government of India has at various times announced its general intention to continue India s current economic and financial liberalisation and deregulation policies. However, protests against such policies, which have occurred in the past, could slow the pace of liberalisation and deregulation. The rate of economic liberalisation could change, and specific laws and policies affecting foreign investment, currency exchange rates and other matters affecting investment in India could change as well. While the Company expects any new government to continue the liberalisation of India s economic and financial sectors and deregulation policies, there can be no assurance that such policies will be continued. The Government of India has traditionally exercised and continues to exercise influence over many aspects of the economy. The Company s business and the market price and liquidity of the Company s shares may be affected by interest rates, changes in policy, taxation, social and civil unrest and other political, economic or other developments in or affecting India. In addition, a change in the Government of India s economic liberalisation and deregulation policies could disrupt business and economic conditions in India generally. Any of these factors could have a material adverse effect on the Company s financial condition and results of operations. Terrorist attacks, civil disturbances, regional conflicts and other acts of violence, particularly in India, may disrupt or otherwise adversely affect the markets in which the Company operates, the Company s business and profitability. India has from time to time experienced social and civil unrest and hostilities, including terrorist attacks, riots and armed conflict with neighbouring countries. Events of this nature in the future could influence the Indian economy and could have a material adverse effect on the Company s business as well as the market for securities of Indian companies. Furthermore, India has witnessed local civil disturbances in recent years, and it is possible that future civil unrest as well as other adverse social, economic or political events in India could have an adverse impact on the Company s business. Such incidents could also create a greater perception that investment in Indian companies involves a higher degree of risk and could have an adverse impact on the Company s business, results of operations and financial condition. 23

24 Any downgrading of India s debt rating by a domestic or international rating agency could negatively impact the Company s business. Any adverse revisions to India s credit ratings for domestic and international debt by domestic or international rating agencies may adversely impact the Company s ability to raise additional financing as well as the interest rates and other commercial terms at which such additional financing is available. This could have an adverse effect on the Company financial results and business prospects, ability to obtain financing for capital expenditures and the price of the Company shares or ADSs. The Company will be required to prepare financial statements under Ind-AS (which is India s convergence to IFRS). The Company currently prepares annual and interim financial statements under Indian GAAP and annual financial statements under IFRS. The Company will be required to prepare annual and interim financial statements under Indian Accounting Standard 11 First-time Adoption of Indian Accounting Standards, or Ind-AS from April 1, 216. Ind-AS differs in certain respects from Indian GAAP and IFRS and therefore financial statements prepared under Ind-AS may be substantially different from financial statements prepared under Indian GAAP or IFRS. There can be no assurance that the Company s financial condition, results of operation, cash flow or changes in shareholders equity will not be presented differently under Ind-AS compared to Indian GAAP or IFRS. When the Company adopts Ind-AS reporting, it may encounter difficulties in the ongoing process of implementing and enhancing its management information systems. There can be no assurance that the adoption of Ind-AS will not adversely affect the Company s financial condition or results of operations. 24

25 BRIEF DETAILS ABOUT THE ISSUER Name: Registered Office of the Company: Corporate Office of the Company: CIN No. Tata Motors Limited Bombay House, 24 Homi Mody Street, Mumbai 4 1 Bombay House, 24 Homi Mody Street, Mumbai 4 1 CIN: L2892MH1945PLC452 Phone No.: Fax No.: Compliance Officer of the Company: CFO of the Company: Website: Sole Arranger: Mr. H. K. Sethna inv_rel@tatamotors.com Mr. C Ramakrishnan Kotak Mahindra Bank Limited 27BKC, Plot No. C - 27, G Block, Bandra Kurla Complex, Bandra East, Mumbai-451 CIN L6511MH1985PLC38137 Tel: Fax: dcm@kotak.com Debenture Trustee: Registrar to the Issue: Credit Rating Agency: IL&FS Trust Company Limited The IL&FS Financial Centre, 7th Floor, East Quadrant, Plot C- 22, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 451 id : itcl@ilfsindia.com Fax No : TSR Darashaw Limited 6-1, Haji Moosa Patrawala Ind. Estate, 2, Dr. E. Moses Road, Mahalaxmi, Mumbai Tel No Fax No Credit Analysis & Research Limited (CARE) 4 th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai Tel no Fax no

26 Auditors: Deloitte Haskins & Sells LLP Chartered Accountants Indiabulls Finance Centre - Tower 3, 31st Floor, Elphinstone Mill Compound, Senapati Bapat Marg, Elphinstone (West), Mumbai

27 A. BRIEF SUMMARY OF THE BUSINESS / ACTIVITIES OF TATA MOTORS LIMITED (I) OVERVIEW The Tata Group, founded by Jamsetji Tata in the mid-19th century, is one of India s largest and most respected business conglomerates with over 1 operating companies in seven business sectors and revenues of approx. US$ billion in fiscal 215. Tata Motors Limited is India's largest automobile company and with consolidated gross revenues of US$ billion in fiscal 215, it is the largest company based on revenue in the Tata Group. In September 24, TML was the first company from India s engineering sector to list on the New York Stock Exchange. TML is one of India s foremost leaders in commercial vehicles sold in each segment, and among the top six passenger vehicle manufacturers in terms of units sold in India during fiscal 215. It has the widest portfolio of automotive products, ranging from sub-one ton to 49-ton GVW trucks (including pickups) and from small, medium, and large buses and coaches to passenger cars and utility vehicles. In addition, through Tata Daewoo Commercial Vehicle Co. Ltd. (TDCV), its wholly-owned subsidiary in South Korea, it manufactures a range of high horsepower trucks ranging from 22 horsepower to 5 horsepower, including dump trucks, tractor-trailers, mixers and cargo vehicles. TML s automotive operations in India include the design, manufacture, assembly and sale of the above-mentioned products, related parts and accessories and the financing business of its vehicles. In June 28, Tata Motors Limited acquired the Jaguar Land Rover business from Ford Motor Company. Jaguar Land Rover is a global premium automotive business, which designs, engineers and manufactures Jaguar luxury performance cars and Land Rover premium all-terrain vehicles. Jaguar Land Rover has internationally recognized brands, a strong product portfolio of award winning luxury performance cars and premium all-terrain vehicles, brand specific global distribution networks and strong research and development capabilities. As part of the acquisition, TML acquired the global businesses relating to Jaguar Land Rover, including three major manufacturing facilities and two advanced design and engineering facilities in the United Kingdom, together with national sales companies in several countries. The Company s sales and distribution network in India as of March 31, 215, comprises approximately 3,94 sales and service contact points for the Passenger and Commercial Vehicle businesses. In line with the growth strategy, TML has formed a 1% subsidiary, TML Distribution Company Limited, or TDCL, in March 28 to act as a dedicated logistics management company to support the sales and distribution operations of TML s vehicles in India. TDCL provides logistic support for vehicles manufactured in TML s facilities and has set up stocking points at some of its plants and also at different places throughout India. TDCL helps in improving planning, inventory management, transport management and on-time delivery. TML also markets its commercial and passenger vehicles in several countries in Europe, Africa, the Middle East, South East Asia, South Asia and other African countries. TML has a network of distributors in almost all of the countries where it exports the vehicles. TML operates six principal automotive manufacturing facilities in India. The first facility was established in 1945 at Jamshedpur in the state of Jharkhand in eastern India. TML commenced construction of a second facility in 1966 (production commencing in 1976) at Pune, in the state of Maharashtra in western India, a third in 1985 (with production commencing in 1992) at Lucknow, in the state of Uttar Pradesh in northern India, a fourth at Pantnagar in the state of Uttarakhand in northern India which commenced operations in fiscal 28, and a fifth at Sanand in Gujarat for manufacturing of the Tata Nano, which commenced operations in June, 21. The Company started manufacturing facility at Dharwad in the state of Karnataka in February 212. TML has set up a plant for the manufacture of Tata Marcopolo buses under its joint venture with Marcopolo at Dharwad in Karnataka and at Lucknow in Uttar Pradesh. 27

28 TML has also set up research and development facilities, Tata Motors European Technical Centre Plc in the United Kingdom. TDCV s manufacturing facilities are based in Gunsan, South Korea. TDCV has received the ISO/TS certification, an international quality systems specification given by SGS UK Ltd., an International Automotive Task Force (IATF) accredited certification body. TDCV is the first Korean automobile original equipment manufacturer to be awarded the same. Fiat India Automobiles Limited, its joint venture with Fiat Group Automobiles S.p.A, has its manufacturing facility located at Ranjangaon in the state of Maharashtra. The plant is used for manufacturing of Tata and Fiat branded cars as well as engines and transmissions for use by both the partners. Tata Motors (Thailand) Limited is a joint venture with Thonburi Automotive Assembly Plant Co. Limited, Thailand, for the manufacture and assembly of pickup trucks. The manufacturing facility is located in Samutprakarn province, Thailand. Jaguar Land Rover operates three principal automotive manufacturing facilities and an engine manufacturing facility in the United Kingdom, as well as an automotive manufacturing facility in China as part of its joint venture with Chery Automobile Company Ltd. In December 214, Jaguar Land Rover began construction on a new production facility in Brazil. In December 215, Jaguar Land Rover has confirmed Slovakia as the location for its next manufacturing site with an initial capacity of 15, vehicles and construction will commence in 216. Automotive operations TML produces a wide range of automotive products, that includes passenger cars, utility vehicles, commercial vehicles (ranging from light to heavy), commercial passenger carriers, defense vehicles, international luxury cars and premium all-terrain vehicles and the peoples car i.e. Tata Nano. The category wise unit sales in the domestic market and exports for FY 216 (9 months up to December 215), FY 215, FY 214 and FY 213 on a non-consolidated basis are set forth in the table below: Sr. No. Category FY 216 (9 months up to December 215) FY 215 FY214 FY213 (No. of Units) Domestic Sales 1 M&HCV 1,9,62 1,26,369 1,9,984 1,42,764 2 LCV 1,18,515 1,91,411 2,67,925 3,93,468 3 Cars (Tata + Fiat) 82,3 1,9,499 1,7,849 1,79,695 4 Utility Vehicles / Vans 14,413 24,279 31,192 47,136 5 Jaguar / Land Rovers 1,653 2,875 2,85 2,494 Total 3,26,51 4,54,433 5,19,755 7,65,557 Exports from India 4,923 49,936 49,922 5,938 Installed Capacity As of March 31, 215, the Company s total vehicle production capacity in India determined on the basis of two production shifts per day (except Uttarakhand plant for which capacity is on three shift basis) and including capacity for the manufacture of replacement parts, was 16,37, units annually. These are estimated production capacity on a double shift basis for all plants (except Uttarakhand plant for which 28

29 capacity is on three shift basis) for manufacture of Medium and Heavy Commercial Vehicles, Light Commercial Vehicles, Utility Vehicles and Passenger Cars. Research & Development The Company s research and development activities focus on product development, environmental technologies and vehicle safety. The Company s Engineering Research Centre, or ERC, established in 1966, is one of the few in-house automotive research and development centres in India recognised by the Government. ERC is integrated with all of the Tata Motors Global Automotive Product Design and Development Centers in South Korea, Italy and the United Kingdom. In addition to this, the Company leverages key competencies through various engineering service suppliers and design teams of its suppliers. The Company has a passenger car electrical and electronics facility for the development of hardware-inthe-loop systems, labcars and infotainment systems to achieve system and component integration. The Company has an advance engineering workshop, with a lithium-ion battery module, for the development of electric vehicle and hybrid products. The Company has a crash test facility for passive safety development in order to meet regulatory and consumer group test requirements and evaluate occupant safety, which includes a full vehicle level crash test facility, a sled test facility for simulating the crash environment on subsystems, a pedestrian safety testing facility, a high strain rate machine and a pendulum impact test facility for goods carrier vehicles. This facility is also supported with computer-aided engineering infrastructure to simulate tests in a digital environment. The Company s safety development facilities also incorporate other equipment the Company believes will help improve the safety and design of its vehicles, such as an emission labs engine development facility, a testing facility for developing vehicles with lower noise and vibration levels, an engine emission and performance development facility and an eight poster test facility that helps to assess structural durability of M&HCVs. In addition, the Company is installing a new engine noise test facility and transmission control unit which the Company expects will aid powertrain development. Other key facilities include a full vehicle environmental testing facility, a material pair compatibility equipment corrosion test facility, heavy duty dynamometers and aggregate endurance test rigs. The Company s product design and development centres aim to create a highly scalable digital product development and virtual testing and validation environment, targeting to a reduced of product development cycle-time, improved quality and ability to create multiple design options. Global design studios are key part of the Company s product conceptualisation strategy. The Company has aligned its end-to-end digital product development objectives and infrastructure with its business goals and has made significant investments to enhance its capabilities, especially in the areas of product development through computeraided design, computer aided manufacturing, computer-aided engineering, knowledge-based engineering, product lifecycle management and manufacturing planning. In specific engineering review processes, such as digital mock up, and virtual build and validation, the Company has been able to provide capabilities for reduced time and increased quality in product designs. The design IP is managed through a product lifecycle management system, enabling backbone processes, the Company has institutionalized issue tracking work flow based systems in various domains to manage them effectively. The Company has initiated a technology platform for small electric vehicles with a GVW of 1 tonne with the National Automotive Board, SIAM and other original equipment manufacturers. In addition, the Company s research and development activities also focus on developing vehicles that consume alternative fuels, including CNG, liquefied petroleum gas, bio-diesel, compressed air and electricity. The Company is continuing to develop green technology vehicles and is presently developing an electric vehicle on the small commercial vehicle platform. The Company is pursuing alternative fuel options such as ethanol blending. Furthermore, the Company is working on development of vehicles fueled by hydrogen. The Company is also pursuing various initiatives, such as the introduction of premium lightweight architecture, to enable its business to comply with the existing and evolving emissions legislations in the 29

30 (II) developed world, which it believes will be a key enabler of both reduction in CO 2 emissions and further efficiencies in manufacturing and engineering. The Company has implemented initiatives in vehicle electronics, such as engine management systems, invehicle network architecture and multiplexed wiring. The Company is in the process of implementing electronic stability programs, automated and automatic transmission systems, telematics for communication and tracking, anti-lock braking systems and intelligent transportation systems. The Company has implemented new driver information technologies and high performance infotainment systems with IT enabled services. Likewise, various new technologies and systems including hybrid technologies that would improve the safety, performance and emissions of the Company s product range are being implemented in its passenger cars and commercial vehicles. The Company is developing an enterprise-level vehicle diagnostics system with global connectivity in order to achieve faster diagnostics of complex electronics in vehicles in order to provide prompt service to customers. The Company is also developing prognostic data collection and analysis for failure prediction to the end customer. Furthermore, the Company s initiative in telematics has expanded into a fleet management, driver information and navigation systems, and vehicle tracking system using global navigation satellite systems. The Company intends to incorporate Wi-Fi and Bluetooth interfaces in its vehicles to facilitate secure and controlled connectivity to third-party IT enabled devices. In 26, the Company established a wholly-owned subsidiary, TMETC, to augment the abilities of its Engineering Research Centre, or ERC, with an objective to obtain access to leading-edge technologies to support product development activities. In October 21, the Company also acquired a design house in Italy, Trilix. CORPORATE STRUCTURE Subsidiaries, Associate Companies and Joint Ventures TML had the following consolidated subsidiaries and associates and other related entities as of December 31, 215: Sr. No. NAME OF THE COMPANY Shareholding % (A) DIRECT SUBSIDIARIES 1 Concorde Motors (India) Limited 1. 2 Sheba Properties Limited * 1. 3 TAL Manufacturing Solutions Limited 1. 4 Tata Motors European Technical Centre PLC 1. 5 Tata Motors Insurance Broking and Advisory Services Limited 1. 6 Tata Motors Finance Limited 1. 7 TML Holdings Pte. Limited 1. 8 TML Distribution Company Limited 1. 9 Tata Hispano Motors Carrocera S.A Tata Hispano Motors Carrocerries Maghreb SA TML Drivelines Limited Trilix S.r.l Tata Precision Industries Pte. Limited Tata Technologies Limited Tata Marcopolo Motors Limited 51. (B) INDIRECT SUBSIDIARIES (i) Subsidiaries of TML Holdings Pte. Ltd. 16 Tata Daewoo Commercial Vehicle Company Limited Tata Daewoo Commercial Vehicle Sales and Distribution Company Limited 1. 3

31 18 Tata Motors (Thailand) Limited Tata Motors (SA) (Proprietary) Limited 6. 2 PT Tata Motors Indonesia PT Tata Motors Distribusi Indonesia 1. TMNL Motor Services Nigeria Limited (Incorporated w.e.f. September 2, 215) Jaguar Land Rover Automotive Plc 1. (ii) Subsidiaries of Jaguar Land Rover Automotive Plc 24 Jaguar Land Rover Limited Jaguar Land Rover Austria GmbH Jaguar Land Rover Japan Limited JLR Nominee Company Limited Jaguar Land Rover Deutschland GmbH Jaguar Land Rover North America LLC 1. 3 Jaguar Land Rover Nederland BV Jaguar Land Rover Portugal - Veículos e Peças, Lda Jaguar Land Rover Australia Pty Limited Jaguar Land Rover Italia Spa Jaguar Land Rover Korea Company Limited Jaguar Land Rover Automotive Trading (Shanghai) Company Limited Jaguar Land Rover Canada ULC Jaguar Land Rover France, SAS Jaguar Land Rover (South Africa) (Pty) Limited Jaguar e Land Rover Brasil Importacao e Comercia de Veiculos Ltda 1. 4 Limited Liability Company "Jaguar Land Rover" (Russia) Jaguar Land Rover (South Africa) Holdings Limited Jaguar Land Rover India Limited Jaguar Land Rover Espana SL Jaguar Land Rover Belux NV Jaguar Land Rover Holdings Limited Jaguar Cars South Africa (Pty) Limited The Jaguar Collection Limited Jaguar Cars Limited Land Rover Exports Limited 1. 5 Land Rover Ireland Limited Land Rover Parts Limited (Dissolved with effect from July 14, 215) The Daimler Motor Company Limited Daimler Transport Vehicles Limited S.S. Cars Limited The Lanchester Motor Company Limited Shanghai Jaguar Land Rover Automotive Services Company Limited Jaguar Land Rover Pension Trustees Limited JDHT Limited 1. Silkplan Limited (Acquired by Jaguar Land Rover Limited on April 16, ) 1. 6 Jaguar Land Rover Slovakia s.r.o (Incorporated w.e.f. November 9, 215) Jaguar Land Rover Singapore Pte. Ltd (Incorporated w.e.f. November 25, 215) 1. (iii) Subsidiaries of Tata Technologies Ltd. 62 Tata Technologies Inc Tata Technologies (Canada) Inc Tata Technologies de Mexico, S.A. de C.V

32 65 Tata Technologies Pte Limited Tata Technologies (Thailand) Limited Tata Technologies Europe Limited INCAT International Plc INCAT GmbH Cambric Limited Tata Technologies SRL Cambric GmbH Cambric UK Limited Midwest Managed Services Inc Cambric Manufacturing Technologies (Shanghai) Company Limited (iv) Subsidiary of Tata Motors Finance Ltd. 76 Tata Motors Finance Solutions Limited (Converted from Pvt. Ltd. with 1. effect from June 4, 215) (C) ASSOCIATES 1 Jaguar Cars Finance Limited Automobile Corporation of Goa Limited Nita Company Limited 4. 4 Tata Hitachi Construction Machinery Company Private Limited Tata Precision Industries (India) Limited Tata AutoComp Systems Limited 26. (D) JOINT VENTURES 1 Tata Cummins Private Limited 5. 2 Fiat India Automobiles Private Limited 5. 3 Chery Jaguar Land Rover Automotive Company Limited 5. 4 Chery Jaguar Land Rover Auto Sales Company Limited 5. 5 Spark44 (JV) Limited 5. 6 TATA HAL Technologies Limited * The Company has divested its entire stake in Sheba Properties Limited to Tata Motors Finance Limited, a subsidiary of the Company on March 31,